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2026-03-10

Market Making Risk Framework for Crypto Pairs

How to design inventory controls and quote skewing rules to keep spreads healthy and reduce directional exposure.

Market MakingRiskTrading Systems

Market making is not only about posting two-sided quotes. The core challenge is controlling inventory while preserving spread capture.

I usually define inventory bands, skew logic, and hard stop thresholds before tuning any alpha.

Risk limits are enforced at strategy level and account level, with alerts and automatic degradation modes.

The result is a system that keeps quoting through turbulence without exposing the portfolio to uncontrolled drift.